Property developer Lang Walker in dispute with South Australia Government over Festival Plaza redevelopment

MORE than $520 million of work to transform Adelaide’s Riverbank precinct has stalled because billionaire Lang Walker and the State Government are locked in a legal battle over an office tower.

The property tycoon wants to build a $100 million multistorey office tower atop a $70 million car park to replace the Festival Centre car park.

But in a dispute which could delay the $350 million Adelaide Casino expansion, the State Government has ruled out building office towers on the Hajek Plaza, between Parliament House and the Festival Centre.

It is understood Mr Walker now wants to build the office tower – about the same height as the nearby Intercontinental Hotel – in the area between the plaza and the Adelaide Casino.

The dispute centres on whether Mr Walker, who in late 2012 won exclusive rights to develop the car park and Riverbank precinct, still has the legal rights to build the office tower.

It is understood Mr Walker has delayed starting the car park until resolution of the legal wrangle, which has not gone to court but has stretched for months.

This is because his company wants to know what, if anything, will be built atop the car park before preparing detailed plans for foundations.

Delay to the 1400-space carpark also complicates the casino expansion, because it has been in talks to secure 1000 car park spaces in the new development. The Advertiser has been told this could delay the project.

It is understood Mr Walker wants to build an office tower worth about $100 million on Station Rd, which connects North Tce to Festival Drv.

Premier Jay Weatherill in February announced a $46.5 million investment to transform the Festival plaza, saying this would be the “centrepiece of the Riverbank project” and the city’s “premier cultural and entertainment plaza”.

Under the agreement with Walker Corporation, Mr Weatherill said, the Government would lease 400 car parks, mostly for the Festival Centre, and the casino would lease the remaining 1000 parks.

Urban Development Minister John Rau declined to comment in detail on the project, saying only that “discussions are ongoing”.

Riverbank Authority chairman Andrew McEvoy, whose yet-to-be-appointed board will be responsible for overseeing the State Government’s investment, also declined to comment.

Both major political parties have ruled out developing office towers on the Festival Plaza, which features pillars and other design by German sculptor Otto Hajek.

Walker Corporation previously was reported to have proposed a 13-storey office building on the site and to want to block in the plaza with buildings on three sides.

The Government rezoned the area in October last year to allow development, including office blocks more than 20 storeys high.

Mr Walker in May told The Advertiser he had an $800 million plan to redevelop the area but sacked infrastructure chief Rod Hook had been preparing a submission for Cabinet, making its future uncertain.

It is not known what comprised the $800 million figure cited by Mr Walker, although it is understood his total proposed investment in the carpark and office building is now about $170 million.

The Sydney-based property magnate, whose company has been a large donor to major state and national political parties, was not available for comment. He previously compared the Riverbank’s potential to up-market hospitality and accommodation areas his company had developed in Sydney and Melbourne.

‘That (the Festival Plaza) has been an eyesore there for a heck of a long time and I think now with the election over ... I think Adelaide needs some things to kick it along, and this is really something,” Mr Walker said in May.

“We have done it in locations in Sydney and Melbourne, creating vibrant, mixed-use precincts, such as King Street Wharf and the Wharf at Woolloomooloo in Sydney and at Collins Square in the Docklands precinct of Melbourne.”

It is unclear whether the car park would be profitable without the Walker Corporation’s associated office tower.

But under the company’s agreement with the Government, the state will lease 400 car parks at a capped cost of $30 million over 30 years.

Most would be provided to the Adelaide Festival Centre as an ongoing revenue stream while some would be reserved for Parliament House use.

The remaining 1000 parks would be leased to casino operator SkyCity for its exclusive use, on similar terms to the Government and supporting its redevelopment.

The casino’s website says it hopes to start work on the expansion later this year, which follows $40 million improvements to existing facilities expected to be completed in the middle of this year.

“Once our $350m investment is fully complete, the new and expanded complex will deliver high-value international and interstate tourism and create much-needed economic growth and jobs for Adelaide and South Australia,” the casino says.

“Our world-class complex will be an integral part of the new entertainment, sporting and arts precinct being developed on the Riverbank, complementing the redeveloped Adelaide Oval and the new and expanded Adelaide Convention Centre, helping South Australia attract a greater share of a lucrative and growing high-value tourist mark.”

SkyCity general manager of business development Aaron Morrison said in May that the casino had been in talks with Walker Corporation over the car park spaces but these talks had not extended to development plans for the Riverbank precinct.

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